NEW YORK — In the first three months of this year, Mayor Eric Adams’ legal defense trust received $22,462 in prohibited donations from a corporate entity and 10 individuals with city government business interests, according to a Daily News review of finance disclosures.

All 11 donations were returned in compliance with the law, Vito Pitta, a lawyer for Adams’ trust, said. The fund has spent $81,300 of the $1.2 million raised so far on vetting services meant to ensure contributions don’t violate any rules, filings released last week show.

Defense trusts can face fines under city ethics law for accepting illegal donations. However, city Conflicts of Interest Board Executive Director Carolyn Miller, whose agency polices legal defense law, noted trusts can generally avoid punishment if they return illegal donations within 20 days of receiving them.

Pitta said all of the 11 donations reviewed by The News were returned within 20 days of receipt and that the vetting process it uses was “approved by COIB.”

But a prominent government watchdog says the returns — which came after the trust gave back another set of similarly illicit contributions earlier this year — point to a problem with the underlying system.

“A simple thing they can and should do is to put the money into a holding pen — an escrow account — and say, ‘We’re not going to do anything with it until we confirm that it’s legal,’ ” said John Kaehny, executive director of the Reinvent Albany government watchdog group.

Escrows aren’t required under the process governing the city legal defense trust system, which Kaehny’s group helped structure as part of its creation in 2019.

Kaehny said in hindsight he wishes he would’ve pushed for legally mandating that trusts set up escrow accounts, where donations would sit locked until it’s affirmed that they’ve been vetted to the Conflicts of Interest Board. Kaehny said he doesn’t know any other U.S. municipalities with elected official legal defense trust systems. The city system caps individual contributions at $5,000.

Individuals and companies who have business dealings with one or more city agencies are listed in a database maintained by the Conflicts of Interest Board.

The law bars those listed in the Doing Business database from donating to mayoral defense trusts to prevent the possibility of pay-to-play politics. Corporate entities are also prohibited from donating.

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